We like to put things in order, right? It helps us understand the concepts and the analytical process further identifies distinguishing characteristics. In the legal world, however, complex concepts are more appropriately placed on a spectrum, rather than a list. Dictionary.com provides a non-physics definition of “spectrum” as follows: “a broad range of varied but related ideas or objects, the individual features of which tend to overlap so as to form a continuous series or sequence, e.g.,the spectrum of political beliefs.”

Key words: range, related and overlap. Today, we look at the following three related legal duties, each of which overlap, but are also unique and distinct:

1. Ordinary Care, e.g., as owed by a bank to its depositors and customers in the handling of their checking transactions (likely a result of privity of contract and statute);

2. Reasonable Care, most commonly found in auto accident cases (arises the moment you turn the key and engage a pedal), medical malpractice, and other so-called “negligence” cases;

3. The Fiduciary Duty, e.g., as owed by a Trustee to a beneficiary, a lawyer in a lawyer-client relationship, or a by a 401(k) plan fiduciary to the participating employees (limited generally to special relationships, but also created by statute, as in case of ERISA and 401(k) plans).

To begin to illustrate how these three duties are related and can overlap, we introduce a fourth: The duty of confidentiality is generally included within The Fiduciary Duty. This duty can also arise in conjunction with all three duties identified above by: (a) special relationship; (b) contract, for example as a non-disclosure agreement (NDA); (c) court order; or (d) statute, as in duty to protect personal information such as social security numbers, etc., to the extent that hackers do not already have all that.

How Do These Three Legal Duties Differ?

Ordinary Care is characterized by what is customaryin any given context. In other words, are you doing what others like you in your field are also presently doing? For example, just because average speed on a Detroit-to-Novi freeway is 96 mph, making such conduct “customary,” that speed is still likely a violation of applicable law. As such, the person driving 96 mph causing an accident violates her duty of Reasonable Care. Recall from the link above, Reasonable Care is defined as, “the level of care that someone of ordinary prudence would have exercised under the same circumstances.” Note that establishing evidence of the Ordinary Care standard will likely require “expert” testimony. For example (back to banking), what if the expert witness testifies that Bank of America is doing something to protect your accounts that Wells Fargo is not doing? Would Chase or JP Morgan then be held to the Ordinary Care standard set by BoA, or could that be an issue for the jury?

So how do we determine what is prudent (Reasonable Care) vs. what is customary (Ordinary Care)?

Assume a “hypothetical utopian” community has 100% of its citizens acting with the utmost level of care, liability under a Reasonable Care standard is still evaluated by what would a reasonable person have done, not as compared to the hyper-vigilant utopians. In contrast, if a “hypothetical” community of reckless people is used to establish Ordinary Care, then the level of care owed under an Ordinary Care could be far less than that of Reasonable Care.

So how does The Fiduciary Duty differ from Reasonable Care and Ordinary Care?

So does this mean that the person owing The Fiduciary Duty, if a reckless person in their own right, then only owes the client the same recklessness for which they would apply to their own affairs? Certainly not. In fact, one of the primary differences between a Reasonable Care Duty and The Fiduciary Duty is that The Fiduciary Duty is owed to a specified individual or group of people, whereas, the duty of Reasonable Care is generally owed to all persons in any particular context, e.g., all persons driving or riding on the road in which you drive your vehicle.

Can the conduct of the client or beneficiary of the duty owed negate or reduce the duty owed?

Yes. For example, in banking law, frequently referred to as the UCC, the bank owes a duty of Ordinary Care unless the customer has failed, ironically, to exercise Reasonable Care by inspecting returned checks for forgeries, or for forgeries by the “same wrongdoer.” Similarly, in a common law negligence case where the duty of Reasonable Care is owed, if the plaintiff is negligent or “comparatively negligent,” then he or she may also lose the benefit of the legal duty owed as the cause of the injury is attributed to their own actions.

The Fiduciary Duty necessarily implies that the party owing this duty must act in the best interests of the beneficiary (loyalty), and no such legal concept like comparative fault can be used to mitigate or eliminate The Fiduciary Duty owed. This is true of lawyers and their clients, of a Trustee for children who have lost their parents and have trust funds to care for them left behind, and also recently covered when a party takes on the “fiduciary” responsibility to ensure that a company’s 401(k) plan is managed in a way that is in the best interests of the employees and not to provide for unnecessary fees or unnecessarily excessive management charges over and above what would have been customarily available.

What to do if you think you have a claim for breach of a legal duty owed?

In September of 2012, our family had plans to host several families at our house to watch the Clemson v. Florida State football game being played in Tallahassee. My wife loves people and entertaining. To create a fun, festive, and pleasant environment for the game, she and the children, while running errands that Saturday, decided to purchase a small fishbowl. Included in this “small” fishbowl were three Orandas. An Oranda, as shown above, is a bright “orange” and white fish from the goldfish family, pretty hearty but they do require a decent amount of space, oxygen, etc. (more than provided in a 2.5 gallon fishbowl). Continue reading “Fish Tank Trade Secrets”→

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Our aim is entertain and educate our readers regarding on the types of legal cases our firm typically handles, including all types of business disputes, defamation, civil rights / excessive force, and intellectual property. We prefer to focus on how facts relate to jury trials, with the intent of adding value to your visit. We sincerely hope you will enjoy the blog and look forward to your comments or other input. See also link to Twitter … @WesFewSC

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About Wes Few

Wes comes from a family of accomplished lawyers. He has over 19 years experience in law practice and as a district court law clerk. Wes’s focus is client service and results. Wes enjoys practicing law, and he treats his client’s cases like they were his own. If you have any questions on legal issues in South Carolina, Wes is committed to make sure you get the right legal advice you need, and would be delighted to speak to you and accept your case, or direct you to the right lawyer for your needs.